Max Levchin, 26

Innovator of the Year

PayPal

After emigrating from Ukraine to Chicago as a teenager, Max Levchin enrolled as a computer science student at the University of Illinois so he could create and break codes. He moved to Silicon Valley after graduation to start a company based on his cryptography passion. In 1999, he cofounded PayPal in Palo Alto, CA, which quickly became the Internets leading person-to-person payments processor. One in four transactions on eBay is settled using PayPals system for debiting and crediting checking accounts and charge cards. In February, the company went public, raising $70 million.As chief technology officer, Levchin not only manages servers that store encrypted data about the companys 15 million members but has led the development of an antifraud program called Igor, named after a Russian fraudster it helped apprehend in 2000. Igor monitors PayPals transactions for unusual behavior, alerting personnel to freeze suspicious accounts or head off cash en route to dubious destinations. The FBI has also enlisted Igor to combat wire fraud. Citibank and Bank One, and even eBay itself,have launched rival online payment services, but none has matched PayPals market share.